Bullogic: Market Update

I think today deserves a Market Update, so here is my thoughts on what has happened thus far.

Market started with a nice pop this morning on talks of the President extended all of the Bush tax cuts. I am not to sure why the market decided to rally on this news. We had already known that the majority of the tax cuts would be extended and the President finally gave in to the +$250k bracket.

We claimed the price level of 1227 this morning with the gap up and quickly sold off through the day. We saw some spots of buying especially down at 1227 but we did end the day below at 1223.

What does this mean?

People are showing a bit more caution than before. A month ago and we would have rallied hard into the close on any news, good or bad. Just because we had a failed breakout of 1227 doesn't mean the rally is dead, but proceed with caution. Bears still need to take this market under 1200 to put pressure on the bulls. A move below 1173 would change this uptrend to a downtrend.

Here is the $SPX chart. I just wanted to demonstrate how much this trend looks like a smaller version of the 1043 trend.